India clocks tepid 4.7% growth in Oct-Dec quarter

[favabeans]

Whatever happened to India grows in spite of the government and not because of the government ?

Whatever happened with 'slow and steady wins the race'?

 

[favabeans]

Bad news across the board for the vibrant Bharat economy...

Slow and steady as she goes...

Reaping the demographic and democratic dividends along the way...

Shining and rising toward 2020...

Suuuuuupah Pawah!!!!!!

GDP up 4.7 percent in Dec quarter; data disappoints ahead of election| Reuters

GDP up 4.7 percent in Dec quarter; data disappoints ahead of election

Credit: Reuters/Mukesh Gupta/Files
An employee works on a transformer inside an electrical appliances manufacturing unit on the outskirts of Jammu February 28, 2014.

Credit: Reuters/Mukesh Gupta/Files

(Reuters) - Contracting industrial output and an investment slowdown dragged India's economic growth to a worse-than-expected 4.7 percent in the three months to December, the last major data release before a general election showed on Friday.

The performance of Asia's third-largest economy fell short of the 4.9 percent growth that had been expected in a Reuters poll of economists, and decelerated fractionally from the prior quarter.

"This does not give much confidence," said Sujan Hajra, chief economist at Anand Rathi in Mumbai, of the data. "This is disappointing, but in line with the trend for past several quarters."

Growth has slowed to half the rate of the boom years of the past decade, likely condemning Prime Minister Manmohan Singh's government to defeat in a general election expected to be held in April and May.

Singh had sought to unleash a wave of investments by fast-tracking approvals for $80 billion in infrastructure projects last year, but implementation has been patchy and the latest data showed no sign of a pickup.

In fact, gross fixed capital formation as a share of overall gross domestic product shrank in the December quarter to 27 percent from 29.4 percent in the previous quarter, measured at current prices.

India GDP, bank lending: link.reuters.com/rad57s

GDP, industry, exports: link.reuters.com/qaw46s

GROWTH PLATFORM

The main opposition challenger for prime minister, Narendra Modi, whose campaign is building momentum, has meanwhile shifted to a more pro-growth stance, saying India needs a strong government to attract foreign investment.

"From the government's perspective, obviously it's not very good news for them, but the fact is there's not much they can do right now as they are getting into election mode," said fund manager Badrish Kulhalli.

"A lot will depend on the shape of the new government and the priority in policies," added Kulhalli, who works at HDFC Standard Life Insurance Co.

Manufacturing shrank by 1.9 percent, in real terms, turning negative after a 1 percent gain in the previous period. Mining and quarrying also did worse, shrinking by 1.6 percent.

Economists had expected improved farm output to contribute to a slight pickup in overall growth, but the year-on-year pace of growth in agriculture, forestry and fishing slowed to 3.6 percent from 4.6 percent in the prior quarter, the data showed.

"Agriculture and industry have both disappointed. With this kind of third quarter numbers, the overall growth for the year looks likely to average around 4.6 percent," said economist Anubhuti Sahay at Standard Chartered bank in Mumbai.

Elevated borrowing costs have added to manufacturers' woes after the Reserve Bank of India (RBI) hiked interest rates three times between September and January to curb stubborn inflation which has showed no signs of easing even as growth tumbled.

While wholesale inflation did slow to an eight-month low in January, the fall was driven by softer food and vegetable prices, which are considered volatile and could head higher again.

The latest figures will make it hard to hit the government's forecast of 5 percent in the fiscal year that ends in March. It forecasts a recovery in growth to near 6 percent for the fiscal year 2014/15.

"From a policy point of view, RBI is focused a lot more on CPI inflation and they have sort of factored in 4.5 to 5 percent GDP growth for this year, so from that perspective I don't think RBI will make any changes," said Kulhalli.

(Additional reporting by Subhadip Sircar and Swati Bhat in Mumbai; Editing by Douglas Busvine, Kim Coghill and Ron Popeski)

 

[arp2041]

With Congress schemes like NEGERA of course there is going to be huge inflation.

They are artificially raising wages, without an equivalent increase in productivity. More wages = more demand for goods/services, and since there is no extra production, the supply remains the same. So there is no way to avoid large inflation in this scenario.

Better to not start such schemes in the first place.

Not to mention that they have just increased the DA of Govt. officers to 100% which will put a burden of around 12k crore rupees to the Govt.

Oh...they remember to do this JUST BEFORE ELECTIONS.

For Congress everything comes for FREE.......

God Forbid, if Congress comes back to power again - Owl Baba has announced Free Health Care to all ---------------->

 

[Kloitra]

Can someone explain, if the gdp growth is over 4.5% in just one quarter, how can it grow just above 5% in all the 4 quarters combined? Should not it be more than the some of growth in each quarter? Or is it inclusive of inflation, which would reduce the growth?

Whatever happened to India grows in spite of the government and not because of the government ?

This is still pretty fast growth, only behind China in big developing economies (BRICS). Better than most developed economy, better than SK, Japan.

 

[fallstuff]

Whatever happened with 'slow and steady wins the race'?

That remains to be seen. I hope their change in leadership as the Indians here are claiming would happen will ramp up the economy.

 

[Developereo]

really come to KPK its present 20% of population . we had 7 blasts in a single day in peshawar
growth of 5 % is simply the policy to provide gas and electricity to large scale manufacturers resulting in rebound effect.
however the problem of current account deficit is still a problem

You are right about all those things.
Anyway, let's leave this thread for Indian GDP discussion.

 

[cloud_9]

 

[Vinod2070]

Well, I am not sure why people are getting so excited about the short term. We know that the last few years have been challenging for Indian economy as they have been for several other emerging economies.

There is no need for despondency. The fundamentals remain intact. The last three decades of growth has already proven what we can do, the next three will be better if we get our act together in time.

Let's hope Modi comes to power and you will see a more purposeful India just like it was in NDA rule earlier. Unfortunately the UPA has made a hash of things.

 

[cirr]

Can't believe India's economic growth still hinges on its agricultural output.

 

[Chanakya's_Chant]

Bad news across the board for the vibrant Bharat economy...

Slow and steady as she goes...

Reaping the demographic and democratic dividends along the way...

Shining and rising toward 2020...

Suuuuuupah Pawah!!!!!!

GDP up 4.7 percent in Dec quarter; data disappoints ahead of election| Reuters

GDP up 4.7 percent in Dec quarter; data disappoints ahead of election

Credit: Reuters/Mukesh Gupta/Files
An employee works on a transformer inside an electrical appliances manufacturing unit on the outskirts of Jammu February 28, 2014.

Credit: Reuters/Mukesh Gupta/Files

(Reuters) - Contracting industrial output and an investment slowdown dragged India's economic growth to a worse-than-expected 4.7 percent in the three months to December, the last major data release before a general election showed on Friday.

The performance of Asia's third-largest economy fell short of the 4.9 percent growth that had been expected in a Reuters poll of economists, and decelerated fractionally from the prior quarter.

"This does not give much confidence," said Sujan Hajra, chief economist at Anand Rathi in Mumbai, of the data. "This is disappointing, but in line with the trend for past several quarters."

Growth has slowed to half the rate of the boom years of the past decade, likely condemning Prime Minister Manmohan Singh's government to defeat in a general election expected to be held in April and May.

Singh had sought to unleash a wave of investments by fast-tracking approvals for $80 billion in infrastructure projects last year, but implementation has been patchy and the latest data showed no sign of a pickup.

In fact, gross fixed capital formation as a share of overall gross domestic product shrank in the December quarter to 27 percent from 29.4 percent in the previous quarter, measured at current prices.

India GDP, bank lending: link.reuters.com/rad57s

GDP, industry, exports: link.reuters.com/qaw46s

GROWTH PLATFORM

The main opposition challenger for prime minister, Narendra Modi, whose campaign is building momentum, has meanwhile shifted to a more pro-growth stance, saying India needs a strong government to attract foreign investment.

"From the government's perspective, obviously it's not very good news for them, but the fact is there's not much they can do right now as they are getting into election mode," said fund manager Badrish Kulhalli.

"A lot will depend on the shape of the new government and the priority in policies," added Kulhalli, who works at HDFC Standard Life Insurance Co.

Manufacturing shrank by 1.9 percent, in real terms, turning negative after a 1 percent gain in the previous period. Mining and quarrying also did worse, shrinking by 1.6 percent.

Economists had expected improved farm output to contribute to a slight pickup in overall growth, but the year-on-year pace of growth in agriculture, forestry and fishing slowed to 3.6 percent from 4.6 percent in the prior quarter, the data showed.

"Agriculture and industry have both disappointed. With this kind of third quarter numbers, the overall growth for the year looks likely to average around 4.6 percent," said economist Anubhuti Sahay at Standard Chartered bank in Mumbai.

Elevated borrowing costs have added to manufacturers' woes after the Reserve Bank of India (RBI) hiked interest rates three times between September and January to curb stubborn inflation which has showed no signs of easing even as growth tumbled.

While wholesale inflation did slow to an eight-month low in January, the fall was driven by softer food and vegetable prices, which are considered volatile and could head higher again.

The latest figures will make it hard to hit the government's forecast of 5 percent in the fiscal year that ends in March. It forecasts a recovery in growth to near 6 percent for the fiscal year 2014/15.

"From a policy point of view, RBI is focused a lot more on CPI inflation and they have sort of factored in 4.5 to 5 percent GDP growth for this year, so from that perspective I don't think RBI will make any changes," said Kulhalli.

(Additional reporting by Subhadip Sircar and Swati Bhat in Mumbai; Editing by Douglas Busvine, Kim Coghill and Ron Popeski)

Earlier I has a doubt but now I am pretty convinced that obsession often leads to retardness!

 

[UKBengali]

India is the biggest example of why multi-ethnic states do not work.

In South Asia, we only need to look at the faster growing states of BD and Sri Lanka and the one thing they both have in common is that they are unitary states.

Sri Lanka is far ahead of India and BD would also be if it did not have a 24 year handicap in development

Anyway, it is interesting to see a real life example of a huge multi-ethnic state to observe and analyse.

 

[Vinod2070]

The least developed country of South Asia is largely a single ethnic state. One where the politics is the most divided.

Anyway it is not about politics so such people who have nothing to contribute should stay away.

India is an example for the world because the world is heterogeneous. Nature intended humanity and the universe to be heterogeneous.

Heterogeneous in religions, faiths, skin color, climate, soil.... That is the beauty of it.

Some people can't understand it and they are too insignificant to matter.

 

[Vinod2070]

Anyway, for those who can't see the obvious, check the growth rates of India and a "homogenous" neighboring country.

World Development Indicators-Google Public Data Explorer

If this seems like faster growth for the least developed country (that we created by saving it from an ongoing orgy of rapine and genocide), someone needs to get his eyes checked.

 

[UKBengali]

We can clearly see that BD economy is growing quicker than India for the last 3 years.

BD economy is growing quicker and quicker every decade; 3% average in the 1970s, 4% average in the 1980s, 5% average in the 1990s, 6% everage in the 2000s and hopefully 7% average in the 2010s.

It's economic growth is very stable unlike a neighbouring state.

 

[Vinod2070]

Last post on this meaningless comparison which was never warranted.

India has grown faster in probably 15 out of the last 20 years and has almost double the par capita income as per all sources (WB/IMF/CIA). So not sure what people are imagining.

Nationhood needs much more than a single ethnicity and the least developed neighbor is a perfect example of that.

Now no more off-topic stuff and pet pathetic theories. These people have run off to countries that are accepting them only because they are happy to be multi-ethnic. Else they will be thrown out from there promptly.